Europe to Seek Sanctions Against U.S. Over Boeing Subsidies

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The New York Times
Friday, September 28, 2012

Europe to Seek Sanctions Against U.S. Over Boeing Subsidies

By NICOLA CLARK

PARIS — The European Union inched closer to a  trans-Atlantic trade war on Thursday, saying that it would seek to impose up to $12 billion a year in sanctions against the United States in retaliation for U.S. government subsidies to Boeing.

The European Commission, the E.U. executive, said it was seeking the sanctions to compensate for the impact of illegal subsidies to Boeing that it said gave Boeing an unfair advantage over its European archrival, Airbus.  The move, which follows a similar trade threat against Europe made by Washington this year, is the latest salvo in a seven-year battle over aircraft subsidies.

A World Trade Organization appellate body affirmed in March that Boeing had received at least $5 billion in improper subsidies from the U.S. government to develop the 787 Dreamliner and other aircraft. But in a separate case, the organization found that Airbus had benefited from four decades of improper subsidies from European governments.  The W.T.O. ordered both sides to end the subsidies.

In a statement, the European Commission said it had decided to ask the W.T.O. for permission to impose trade sanctions after reviewing a list of  remedies submitted this week by the U.S. Trade Representative — remedies the commission said were insufficient.

The commission said it had acted because ‘‘the United States had not lived up to its obligation to remove its illegal subsidies in the aircraft sector, as required by the W.T.O. rulings that clearly condemned U.S. subsidies to Boeing.’’

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